June 16, 2015 – Republic of Mining

Coal is not dead, says Adani – by Mark Ludlow (Australian Financial Review – June 16, 2015)

June 16, 2015

http://www.afr.com/

Indian energy giant Adani, which plans to make a final decision on its $16.5 billion Carmichael Mine this year, believes coal will remain the cheapest source of energy for decades.

As Adani signed agreements with indigenous groups which could deliver benefits worth $250 million over the next 30 years, Adani Australia chief operating officer Samir Vora said talk about the end of fossil fuels was exaggerated.

“Coal is definitely the main source of energy – you can’t deny it. It’s growing every year no matter what anyone says,” he said in an interview.

“India is investing in new generation technology to make coal more efficient to bring down the carbon footprint. There is a balance for everything [like renewables] but coal will undoubtedly remain the main source of fuel for decades.”

Amid speculation Adani would not be able to finance the mega-mine in Central Queensland, Mr Vora said he was confident it would have the funds once final mining and dredging approval was granted by the state and federal governments.

Our view: We’ll all be helping struggling iron mines (Duluth News Tribune – June 15, 2015)

June 16, 2015

http://www.duluthnewstribune.com/

After a staggering 1,000-plus announced layoffs over recent months, Northeastern Minnesota’s iron-mining industry clearly needs a boost. Thanks to the Minnesota Legislature, every time any one of us flips on a light switch we’ll help provide it.

An energy-jobs bill passed during Friday’s special session authorized lower electrical rates for iron mines and other big energy guzzlers. They’ll pay less, leaving us little-guy residential and commercial power users to pay more to make up for it.

While this fact probably won’t help ease the pain of opening your Minnesota Power bill in the near future, for years, the utility said, the guzzlers have been paying more and the rest of us have been enjoying more-affordable rates as a result. We’ve had it good for some time. When Minnesota Power last raised rates in 2011, for example, state regulators approved a 4 percent increase for residential customers and a 16 percent increase for mines and other large industrial customers, as the Star Tribune reported Friday.

So the legislation approved Friday simply allows Minnesota Power to set rates more in line with actual energy use — for both big and small customers, said Pat Mullen, Minnesota Power’s vice president of marketing and communications.

“We have some of the lowest (electrical) rates (for residential customers) in the nation.

NEWS RELEASE: Kinross ranked top socially responsible mining company by Maclean’s

June 16, 2015

Toronto, Ontario, June 16, 2015 – Kinross Gold Corporation (TSX:K; NYSE:KGC) has been ranked the top mining company on the list of Top 50 Most Socially Responsible Companies in Canada developed by Maclean’s magazine in partnership with Sustainalytics, an independent sustainability investment research firm.

The ranking, which appears in the June 15th edition of Maclean’s, comes after Kinross was recognized earlier this month as one of Canada’s Best 50 Corporate Citizens for the sixth consecutive year by Corporate Knights, a media and research firm that promotes social responsibility in the private sector.

“Operating in a socially responsible and sustainable manner is about partnership,” said J. Paul Rollinson, Kinross President and CEO. “We approach that partnership on the basis of respect and a desire to contribute to the prosperity and well-being of the communities where we operate. These rankings reflect the dedication of our employees to transforming that commitment into tangible results when it comes to everything from local hiring, and engaging local suppliers to employing environmental best practices.”

Kinross strives to conduct all its operations in a manner that is safe for employees and local communities, protective of the environment and beneficial to the host countries and communities where it operates. Kinross’ key corporate responsibility accomplishments and commitments include:

Ring of Fire development takes time, says Wynne – by Brent Linton (Thunder Bay Chronicle-Journal – June 16, 2015)

June 16, 2015

Thunder Bay Chronicle-Journal is the daily newspaper of Northwestern Ontario.

It was clear that Ontario’s premier had on her mind the slow-moving development of the Ring of Fire and the contentious sale of Hydro One during her visit to Thunder Bay on Monday.

Kathleen Wynne brought up the ownership of the massive electrical utility during a speech she gave in the city. “By broadening the ownership of Hydro One, we are able to make the infrastructure investments that communities across the North need to thrive,” she said.

“We are ensuring that the regulation that is in place now remains in place in terms of the setting of rates, in terms of the building of transmission, in terms of services across the province. That was very much a critical part of that decision to broaden the ownership of Hydro One.

“In terms of these investments in infrastructure there are consultations that are going to happen across the provinces. I believe there is one in July happening in Thunder Bay . . . because the decisions have not all been made how those investments are going to be made.”

Gold price to climb as fears of a ‘Grexit’ rise – by Rose Powell (Australian Financial Review – June 16, 2015)

June 16, 2015

http://www.afr.com/

The price of gold is tipped to rise as investors use the precious metal as a hedge against financial fallout from Greece’s ongoing debt crisis.

Gold has been trading at about $US1180 per ounce in the last week, and between $US1170 and $US1210 per ounce for months, despite a strengthening US dollar.

However, the price could climb as investors attempt to mitigate the risks of a possible Greek exit from the eurozone if the country defaults on its debt mountain.

“We are only just starting to see signs of contagion from Greece to other bond and equity markets in the eurozone,” Capital Economics analysts said in a note to investors.

“A Greek default alone may no longer be a huge surprise and the sums involved would be small in the global scheme of things. However, if the uncertainty undermines investor confidence in the rest of the region, the gold price is likely to climb a lot further.” Five years after the first bailout, the possibility of a Greek exit from the eurozone has edged closer than ever before.

Shouldn’t India, like China, consider buying Australian iron ore assets? – by Kunal Bose (Business Standard – June 15, 2015)

June 16, 2015

http://www.business-standard.com/

Chinese iron ore production this year is likely to fall below 200 mt from 240 mt in 2014

The world is aware that Chinese steelmakers and investment groups are circling around distressed iron ore assets in Australia with a view to gaining control. Nothing surprising about the recent Chinese moves since these are part of by-now-long-established strategy of the world’s largest producer and consumer of steel to secure future supply of iron ore.

But shouldn’t some of our large producers of steel, which were forced to import rising quantities of iron ore in the past three years due to court-imposed curbs aimed at ending illegal mining, also consider buying assets in Australia and elsewhere when their valuations are so low? India, which not very long ago was the world’s third largest exporter of ore, had to import 15.5 million tonnes in 2014-15 to supplement reduced domestic supplies. Our steelmakers would often complain about domestic ore suppliers charging premiums over world prices.

What will also be a justification for them to seek a presence in Australian iron ore landscape is the difficulty in securing iron ore deposits here and then long gestation in opening mines. This is despite the country sitting on the world’s sixth largest iron ore resources estimated at well over 25 billion tonnes (bt). Business wanderlust led Indian groups in the past to acquire mines in more than one continent, though not all proved to be prized catches.

Rio Tinto uranium shutdown creates demand urgency – by Kip Keen (Mineweb.com – June 15, 2015)

June 16, 2015

http://www.mineweb.com/

What braking on the Ranger 3 Deeps project means for supply.

HALIFAX, NV – The Ranger 3 Deeps uranium project in Northern Australia, mostly owned by Rio Tinto, is dead, or at least in deep sleep for now. And the shelving of Ranger 3 – with a feasibility study no longer going ahead – has important implications for uranium supply, and presumably uranium prices.

This was the conclusion of analysts David Talbot and Zain Nathoo, of Dundee Securities, in a recent note dissecting the impact of Energy Resources decision to halt progress on developing the underground project, which would have extended existing operations at the Ranger uranium mine (now processing stockpiles).

The uranium market is not that large, so decisions like these can quickly have profound effects on supply. In this case we have, as Talbot notes, what could have become – if it reached production – the world’s third largest uranium mine after McArthur River and Cigar Lake, producing some 9 million pounds uranium a year.

Talbot sees the withdrawal of Ranger 3 Deeps as creating urgency for uranium buyers to start looking at securing long term supply contracts.

Billionaire Seeks BHP-Style Conglomerate in Vedanta Deal – by Debjit Chakraborty (Bloomberg News – June 14, 2015)

June 16, 2015

http://www.bloomberg.com/

Billionaire Anil Agarwal’s move to merge his two Indian units will create a national natural resources group to compete with BHP Billiton Ltd. and Vale SA. Agarwal’s Vedanta Ltd. is planning to absorb Cairn India Ltd., combining India’s biggest producer of aluminum and copper with its largest onshore oil producer. The merger will create an entity with a market capitalization of about $11 billion, based on the last traded price of Vedanta Ltd.

“It’s a dream to create a singular yet powerful natural resources conglomerate of Indian origin to mirror the likes of BHP or Vale,” Tom Albanese, chief executive officer of parent Vedanta Resources Plc, said Sunday at the media briefing in Mumbai. “This conglomerate will be globally recognized.”

The merger will also help the group, weighed down by $12 billion of total debt, reorganize the finances of Vedanta Ltd., India’s second-most indebted metals company. The increased size will allow Albanese, the former CEO of Rio Tinto Group, to be more competitive against global resources giants.

“The consolidated entity will have the distinct advantage of size and strength because of the cash on Cairn India’s balance sheet,” Deven Choksey, managing director of K.R. Choksey Shares & Securities Ltd., said in a phone interview.

Alberta premier Rachel Notley didn’t start the oil shock crisis, but she’s making it worse – by Claudia Cattaneo (National Post – June 16, 2015)

June 16, 2015

The National Post is Canada’s second largest national paper.

Alberta’s new NDP government made good Monday on campaign promises to raise corporate taxes and reform political donations, but showed no urgency to address the crisis at hand: a provincial economy suffering from low oil prices that is bleeding private sector jobs, investment and confidence.

The risk is that while Premier Rachel Notley did not create the oil shock — that was OPEC’s handy work — she will be blamed for making it worse by pressing ahead with policies hostile to the dominant oil and gas sector that are accelerating its downward spiral.

Indeed, tensions with the oilpatch are already frayed over her promises to review (and likely raise) oil and gas royalties, toughen up climate change regulations and push for more bitumen upgrading in the province, at a time the sector is broke and laying off staff.

In the first speech from the throne since the NDP replaced the long-governing Tories, Notley outlined her immediate priorities for a short session before the summer break: Corporate taxes are going up to 12 per cent from 10 per cent, and taxes are going up for Albertans earning more than $125,000 to restore the province to “a more typical Canadian tax system.”

Port of Algoma plan shows promise – by Elaine Della-Mattia (Sault Star – June 13, 2015)

June 16, 2015

http://www.saultstar.com/

The idea of turning Sault Ste. Marie into a transportation or trade hub has been around for more than 100 years.

Strategically located in the heart of the Great Lakes, in the centre of Canada and in close proximity to the Midwest, Sault Ste. Marie was created as a trading post.

And over the past century, the city has been mainly industry-focused, with its port locations at the city’s western edge, already well utilized to ship product and materials in and out of Sault Ste. Marie and area.

Developing A Port of Algoma, which would have direct access to rail, road and barge connectivity and utilize the expertise of Essar Ports management, could create vast regional economic potential.

The historical value of Sault Ste. Marie’s strategic location is not lost on Anshumali Dwivedi, chief executive officer of the Port of Algoma.

Dwivedi has only been in Sault Ste. Marie for a year but, as an expert on port development, he already sees the economic development potential.

Russia says will retaliate if U.S. weapons stationed on its borders – by Gabriela Baczynska and Wiktor Szary (Reuters U.S. – June 15, 2015)

June 16, 2015

http://www.reuters.com/

MOSCOW/WARSAW – A plan by Washington to station tanks and heavy weapons in NATO states on Russia’s border would be the most aggressive U.S. act since the Cold War, and Moscow would retaliate by beefing up its own forces, a Russian defense official said on Monday.

The United States is offering to store military equipment on allies’ territory in eastern Europe, a proposal aimed at reassuring governments worried that after the conflict in Ukraine, they could be the Kremlin’s next target.

Poland and the Baltic states, where officials say privately they have been frustrated the NATO alliance has not taken more decisive steps to deter Russia, welcomed the decision by Washington to take the lead.

But others in the region were more cautious, fearing their countries could be caught in the middle of a new arms race between Russia and the United States.

“If heavy U.S. military equipment, including tanks, artillery batteries and other equipment really does turn up in countries in eastern Europe and the Baltics, that will be the most aggressive step by the Pentagon and NATO since the Cold War,” Russian defense ministry official General Yuri Yakubov said.

War Clouds Over South China Sea As U.S. Declares Right To Waters And U.S. Warship Arrives At Subic – by Donald Kirk (Forbes Magazine – May 30, 2015)

June 16, 2015

http://www.forbes.com/

The drumbeat of war on distant horizons is reverberating through Southeast Asia with increasingly strong declarations of U.S. determination to stop the Chinese from expanding their writ over the South China Sea, notably islands claimed by the Philippines, Vietnam, Malaysia and Brunei.

While Defense Secretary Ashton Carter was in Singapore vowing that U.S. planes and ships would go wherever they wanted in international waters WAT -0.71%, the U.S. navy missile cruiser Shiloh was hoving into view at the historic Subic Bay port northwest of Manila.

Reports of Carter’s tough remarks at a gathering of defense ministers and the Shiloh’s visit to Subic Bay, the largest U.S. navy base before the Americans were forced to give it all up more than 20 years ago, were couched in euphemisms that scarcely masked the impression of spiraling tensions. “We want a peaceful resolution of all disputes,” Carter began. “A routine port call,” said a Philippine navy spokesman when asked what the Shiloh was doing at Subic Bay, in the once roaring American base town of Olongapo.

Oh sure. Those soothing assurances somehow only heightened the sense of an impending collision in the South China Sea around the Spratly Islands, where China has added about 2,000 acres to its holdings in the past year and a half by reclaiming land from the shallow waters.